The Congressional Budget Office released a report on August 25 that projects the national deficit will reach $1.3 trillion in 2011, making it the third-largest shortfall in 65 years, exceeded in that time frame only by the deficits of the past two years.
In addition, CBO cites that the number of people age 65 or older will increase by roughly one-third between 2011 and 2021. The population segment will grow from 13% to 17% of the total, and beyond 2021, will increase further, according to the report.
Government spending for the aging population through Medicare, Medicaid and Social Security will account for 44% of federal non-interest spending in 2011, and will also continue to rise, the report states. Outlays for Medicare alone (excluding receipts of Medicare premiums and certain other offsetting receipts) are expected to grow by $35 billion, or 6.7% in 2011.
In terms of some savings, according to CBO, is the reduction of outlays for Fannie Mae and Freddie Mac, which it says will fall $35 billion in 2011. This, CBO says, is mostly due to fewer losses recognized by the entities on their mortgage investments and guarantees this year.
View the CBO report.
Written by Elizabeth Ecker